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What is an Upscale Latino?

Just what is an upscale Latino? Take a drive through some of the manicured suburban neighborhoods of Downey, Whittier, West Covina or parts of Glendale California to get an idea. Or you can read a new report put together by Packaged Facts titled “Upscale Latino Consumers in the U.S.,” which outlines the financial clout of “the 8.2 million Latino adults living in households with an income of $75,000 or more.”

From a summary:

Between 2000 and 2010 the number of Upscale Latino households more than doubled from 1.3 million to 2.9 million, and grew three times faster than the number of non-Latino Upscale Consumer households. Upscale Latino households account for only 21% of all Latino households but now generate 51% of their aggregate income.

With buying power that is expected to reach $680 billion in 2016, Upscale Latinos have an outsize impact on marketing and sales success in the Latino market. Internet marketers and retailers, among others, should place a high priority on reaching out to these shoppers, who account for two-thirds of all Latinos who annually spend $1,000 or more online.

The complete report costs money to download, but since this demographic is of interest not only to marketers but academics, there’s been a fair amount of research on wealthier Latinos lately.

While Latinos and other minorities were disproportionately slammed by the economic downturn, there’s more wealth lurking in middle-class Latino pockets than some might expect. University of Southern California researchers Jody Vallejo and Dowell Myers are some of those who have studied this region’s Latino middle class and its continuing evolution.

In a recent Q&A on this site, Vallejo discussed her research on the Mexican American middle class in Southern California, including how these immigrants and children of immigrants build wealth, how they pass it on, and what can get in the way. Vallejo, who is completing a book on this group of affluent and upwardly mobile Latinos, described them in the interview:

Traditional markers of middle-class status includes employment in white-collar occupations, household incomes over the national median, a college degree, and homeownership. In my study of middle-class Mexican Americans, most of the respondents have graduated from college, the majority own homes, and they are employed in professional careers such as teachers, architects, lawyers, engineers, or they own businesses.

The median household income for my respondents is $100,000, well over the median household income at both the national ($52,029 in 2008) and local ($55,700 in 2008 for Los Angeles) levels.

On the surface, middle-class Mexican Americans appear to be a homogenous group, but there are important differences within this group that shape their experiences in the American middle class. One of these is class background. Some middle class Mexican Americans grow up poor in disadvantaged communities (70% in my sample characterize their class background as either “poor” or “lower middle class”) and are the first in their family to enter the middle class. This segment of the population, the socially mobile, retain strong ties to poorer kin, especially parents, who often continue to toil in low-wage, back breaking jobs. These parents might own a home, but often they lack retirement accounts or other assets to pass on to their children.

On the other hand, some middle-class Mexicans grow up economically secure in middle class households and neighborhoods. Among these respondents, legal status is the critical mechanism that allows parents to move up the economic ladder and provide a middle-class life for their children. The parents of those raised in middle-class households were more likely to have legal status upon arriving in the U.S., or they were able to regularize their status shortly after arrival.

Legal status allows parents to move out of the margins of society and obtain well paying jobs or start a legitimate business. These parents generally move to middle-class neighborhoods and have more financial resources to invest in education.

In addition to legal status, investment in real estate is key for immigrant families moving up the economic ladder, as other research has shown. And while real estate dreams proved to be the financial downfall of many in recent years, home buying continues to be the main way in which immigrant families rise from have-not to have.

Dowell Myers of USC’s School of Policy, Planning, and Development wrote recently in a report about how as aging white California homeowners sell off property, it’s likely that Latino families (or Asian American families) will buy their homes:

…the total number of white non-Hispanic homeowners in California declined by 157,877 in the 2000s. In contrast, Latino homeowners increased by 383,778 over the decade, accounting for 78.5% of California’s total growth in homeownership.

It is young Latino home buyers, and also Asians, who have taken up the slack from diminished white demand. The new homeowners at young ages were 192,284 less than in the decade of the 1990s even though the sell-off by older homeowners was increasing. Latinos contributed 32.4% of the new homeowners at young ages during the 2000s, and they have potential to do much more.

This, of course, has already been a longstanding trend in some L.A. County communities like the southeastern cities of Whittier or Downey, a once-predominantly white Los Angeles suburb turned Latino suburb dubbed by some as “the Mexican Beverly Hills.” Both cities’ residents range in income levels, but the manicured lawns of these neighborhoods’ more affluent streets haven’t changed much, only their population.